Supreme Court to Decide Temp Workers Overtime Claims

A case that has the potential to cost staffing companies — and, in turn, their clients — hundreds of millions of dollars is headed to the U.S. Supreme Court.

The justices agreed to hear a FLSA suit against Amazon’s temp worker provider Integrity Staffing Solutions over whether workers should be paid for the time they spend going through company security on their way home.

Two former employees provided by Integrity who worked at Amazon’s two Nevada warehouses sued the retailer’s staffing firm demanding to be paid for the 20-25 minutes it routinely takes them to clear the daily security check. Because the case was filed as a class action, it could affect many or most of the estimated 38,000 temps at Amazon’s three dozen U.S. warehouses and distribution centers.

Mark Thierman, a labor and employment attorney with Thierman Law Firm in Reno represents the workers. He says that with turnover, the number of potential class action participants could reach 100,000 and, if they should win, the cost could reach into the hundreds of millions.

“If you want to take the pencil to paper we’re talking hundreds of millions of dollars,” the lawyer says, noting most of the workers are paid between $9 and $12 an hour. Thierman has successfully sued multiple big-name companies over overtime and related FLSA claims, recovering by his reckoning several hundred million in pay for the plaintiffs.

In the lawsuit, he and the workers argued that going through security checks at the end of the day was at the employer’s insistence and was “necessary to the employer’s task of minimizing ‘shrinkage’ or loss of product from warehouse theft.”

The Fair Labor Standards Act, as explained by the U.S. Department of Labor, says, “The workweek ordinarily includes all time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed work place.” It goes on to explain that a workday:

…means the period between the time on any particular day when such employee commences his/her ‘principal activity’ and the time on that day at which he/she ceases such principal activity or activities. The workday may therefore be longer than the employee’s scheduled shift, hours, tour of duty, or production line time.

Over the decades since the FLSA was enacted, courts have interpreted such things as “principal activity” and have often been called upon to decide whether waiting in line to punch in or putting on or taking off uniforms (donning and doffing) are compensable. In 1947 Congress enacted the Portal-to-Portal Act to clarify and limit what is compensable work time.

Preliminary and postliminary activities are still compensable under the Portal-to-Portal Act if they are “integral and indispensable” to an employee’s principal activities. …To be “integral and indispensable,” an activity must be (1) “necessary to the principal work performed” and (2) “done for the benefit of the employer.

In the Amazon case, the appeals court said that “the security clearances are necessary to employees’ primary work as warehouse employees and done for Integrity’s benefit.” It ruled that the federal district court in Las Vegas was mistaken when it decided against the workers and reinstated the action. With so many millions of dollars at stake, Integrity Staffing appealed to the Supreme Court, which announced yesterday that it would hear the case in its next term.

The high court was urged to take up the case by the U.S. Chamber of Commerce and others, who pointed out that different circuits have interpreted the application of the Fair Labor Standards Act differently in similar situations. According to Bloomberg News, Amazon is facing suits against it directly as are Apple and CVS Pharmacy.

John has been writing about recruiting and employment for nearly a decade,and has worked in the field for almost twice as long. He traces his connection to the employment industry back to the beginning of the commercial Internet when he managed some of the earliest news oriented websites. These offered job boards, which became highly popular with users. John worked with agencies and large employers on job postings, resume search, and campaigns, before consulting with media companies on audience development and online advertising sales.

These people are paid $9 to $12 hour – stop being cheap and pay them for their time. This is like WalMart forcing people to punch out and then still do work.
Pay a fare wage – the 1% has more than enough money.